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Nip it in the Bud: A 5 Step Plan for Employers to Prepare for Cannabis Legalization in Canada

Recreational cannabis isn’t legal yet – but much of the associated stigma is already gone, usage is up and employers are feeling the workplace effects of the pending legalization now. On April 13, 2017, Canada’s federal government proposed legislation to legalize and regulate access to recreational (non-medical) cannabis in Canada. The government is hoping to make the proposed law effective in July 2018, and it still has to go through the legislative process so it could change. But employers need to nip cannabis in the workplace in the bud by acting now to be prepared for cannabis legalization when it happens.

Here’s a five-step plan to help employers prepare for the workplace impact of cannabis legalization.

Educate yourself on cannabis basics.

Many employers haven’t educated themselves about cannabis because, practically, they didn’t need to: the mere fact it’s generally illegal (with the exception of medical cannabis, which is generally handled as is any other medication) is sufficient to “outlaw” it. But once it’s legal, employers will need the ability to manage its use and effects in the workplace – and that requires at least basic knowledge about cannabis.

The Drug. Cannabis (a.k.a. marijuana, marihuana, weed, pot …) comes from the cannabis sativa plant and contains hundreds of chemical substances and more than 100 cannabinoids. The two most commonly known are: delta-9-tetrahydrocannabinol (THC), which has therapeutic effects and is primarily responsible for cannabis’s psychoactive effects; and cannabidiol (CBD), which has potential therapeutic effects but no psychoactive effects. THC potency is usually expressed as a THC percentage by weight of the substances. THC potency in dried cannabis has risen from an average of 3% in the ‘80s to around 15% today; some Canadian licensed medical producers are capable of growing cannabis with THC levels exceeding 30%. The proposed new law doesn’t limit THC potency now, though it could later do so. While typical users don’t require large amounts of THC to experience the psychoactive effects, the demand for and availability of products with higher THC levels persists where cannabis is legalized.

Forms & Uses. Most people are familiar with smoking dried cannabis in hand-rolled cigarettes, pipes or water pipes – but people can consume cannabis in many forms, including: “vaping”; eaten in foods cannabis-infused called “edibles” (e.g., cooking oils and drinks); applied as oils, ointments, tinctures, cream and concentrates (e.g. butane hash oil, resins and waxes); and of course, ingested as oral pills and oral sprays. Notably, the proposed new laws prohibit the sale of edibles and concentrates (at least for now), though permits their preparation for person use. These products can be made using different types of cannabis with varying levels of THC and CBD, resulting in different intensities and effects, and the different ways in which cannabis and its extracts are used shifts the THC concentration. The two main uses of cannabis are medical and recreational (or “non-medical”).

Medical. Many believe cannabis has therapeutic benefits for some medical conditions (though it’s fair to say there’s not yet any medical consensus on this, as court decisions in the context of casualty insurance coverage of medical cannabis illustrate). It’s now used for a wide range of “medical” purposes, including to: stimulate appetite for AIDS patients; reduce chemotherapy-related nausea and vomiting; treat MS, muscle spasticity, cancer-related pain and glaucoma; prevent epileptic seizures; lessen side effects from treating hepatitis C and increase treatment effectiveness; relieve pain and reduce inflammation from arthritis; help metabolism; improve Lupus symptoms; soothe tremors from Parkinson’s disease; help with PTSD; and protect the brain after stroke. Potential benefits include that it might: prevent cancer from spreading; reduce anxiety; slow the progression of Alzheimer’s disease; treat inflammatory bowel diseases; protect brain from concussions and trauma; and reverse carcinogenic effects of tobacco.

Recreational (a.k.a. “non-medical”). Cannabis is the most-used illicit drug and the most trafficked in the world and is, along with alcohol and tobacco, a favourite recreational drug of Canadians. In fact, Canada has one of the highest rates of cannabis use in the world: more than 40% of Canadians have used cannabis in their lifetime, and it’s Canada’s second most-used recreational drug after alcohol. In 2014, Canada’s leading hospital for mental illness, the Centre for Addiction and Mental Health (CAMH), Centre for Addiction & Mental Health found 40% of Canadians have used cannabis, and 10% had used it in the prior year, 20% of youth between 15 and 24 had used it in the prior year – and a rather astonishing 70% of Canadian cannabis users are 25 or older.

Effects. Cannabis’s effects are caused by the actions of cannabinoids on biological “targets”, a system of specific receptors and molecules throughout the body (the endocannabinoid system). Consumers can typically feel the effects of cannabis 30 minutes to 1 hour after consuming it. Short-term effects include: relaxation; time distortion; impaired thinking, judgment, coordination and memory; paranoia and anxiety; and bloodshot eyes, dry mouth, slurred speech and increased heart rate. Long-term effects include: lung irritation and breathing problems; harm to fetal brain development, if smoked during pregnancy; and decreased learning and cognitive thinking in young adults who use heavily while the brain is still developing.

Put it Into (Social & Political) Context.

The social and political landscape respecting cannabis has changed vastly in the last century. Employers need to keep up with the times of their employees, and avoid making judgment calls on the morality (or immorality) of cannabis use, even if they have a differing personal opinion of cannabis use.

Criminalization. In 1923, cannabis was added to Canada’s Confidential Restricted List. Historians usually point to the 1922 publication of The Black Candle as inspiring the addition; one chapter is entitled “Marijuana – A New Menace”, and claims the only ways out of cannabis addiction are insanity, death or abandonment. This fairly common public position is reflected in a 1942 movie promoted as revealing the social evils of cannabis: “From the hot dog stand selling ‘reefer’ across from a school, to the parties that put teens into the vile grips of promiscuity, dancing in their underwear and murder…”.

LeDain Commission. Things did change: as early as 1969, the Canadian government contemplated a different approach to recreational cannabis. Begun in 1969 and completed in 1972, the LeDain Commission of Inquiry into the Non-Medical Use of Drugs was a Canadian government commission. The majority’s recommendations included the repeal of the prohibition against the simple possession of cannabis and cultivation for personal use; the minority view recommended a policy of legal distribution of cannabis, removal of cannabis from the predecessor to the Controlled Drugs and Substances Act (CDSA, the law that currently governs the production and possession of non-medical cannabis) and provincial controls on possession and cultivation, similar to those governing alcohol use. The report also recommended the federal government conduct further research to monitor and evaluate changes in the extent and patterns of the use of cannabis and other drugs and to explore possible consequences to health, and personal and social behaviour resulting from the controlled legal distribution of cannabis. However, the (ironically Trudeau) government largely ignored the report.

Costs. Canada’s prohibition and criminalization of recreational cannabis has persisted to present day – yet hasn’t deterred Canadians from consuming it: youth continue to use cannabis at rates among the highest in the world; according to Stats Canada, there were 104,000 drug-related offences reported by police in Canada in 2014, 66% of which were cannabis-related and primarily for possession; around 60,000 Canadians are arrested (nearly 3% of all arrests) for simple possession of cannabis every year; over 500,000 Canadians carry a criminal record for this offense, which can significantly limit their employment opportunities or restrict their ability to travel; and for 2002, the annual cost of enforcing cannabis possession laws (including police, courts and corrections) in Canada was estimated at $1.2B.

Shifting Public Opinion. Public opinion on cannabis control has shifted considerably even in just the last decade: 10 years ago about half of Canadians believed cannabis use should be decriminalized or legalized; today, about two thirds of Canadians hold this view and most Canadians no longer believe that simple cannabis possession should be subject to harsh criminal sanctions, and support the Government’s commitment to legalize, tax and regulate cannabis. Reflecting the new social landscape, during the 2015 Canadian election the Liberal Party promised to legalize, regulate and restrict access to cannabis.

Understand the Legal Landscape.

The law is notoriously slow to change, and cannabis regulation has been no different – until recently: the Canadian legal landscape for cannabis access and use is about to drastically change.

The path to “legalization”. In 2015, the newly elected Liberal majority government soon announced it was creating a federal-provincial-territorial process to discuss a jointly suitable process for the legalization of cannabis possession for recreational purposes and embarked on doing so. In Fall 2015, the Prime Minister sent a Mandate Letter to Canada’s health minister expressing his desire that she begin working on efforts leading to the eventual legalization and regulation of cannabis. In November 2015, Canada’s Justice Minister said she and the ministers of Health and Public Safety were working on specifics around the legislation. In its December 2015 Throne Speech, the government committed to legalizing, regulating and restricting access to cannabis and in April 2016, Canada’s Health Minister announced the government’s plan to introduce new legislation to the House of Commons the following spring. Shortly after, in June 2016, Health Canada announced the creation of the newly formed Task Force on Marijuana Legalization and Regulation to seek input on the design of a new system to meet its intention to legalize, strictly regulate and restrict access to cannabis. Its mandate was to consult with key stakeholders and recommend a framework. The Task Force’s initial Discussion Paper reiterated that the current approach to cannabis prohibition isn’t working and set out to explore five key themes. From July 1 to August 29, 2016, an open public consultation forum was available for Canadians. Finally, on December 13, 2016 the Task Force released its final report, “A Framework for the Legalization and Regulation of Cannabis in Canada”. On April 13, 2017, the federal government proposed legislation that will legalize recreational cannabis in Canada; the target effective date is July 1, 2018: (Bill C-45 An Act respecting cannabis and to amend the Controlled Drugs and Substances Act, the Criminal Code and other Acts and Bill C-46 An Act to amend the Criminal Code (offences relating to conveyances) and to make consequential amendments to other Acts). The legislation now must go through the legislative process, so assuming it is ultimately passed into law, it could still change before it takes effect.

“Medical” vs. “recreational” cannabis use. Canadian law treats “recreational” (or “non-medical”) cannabis and its use, and “medical” cannabis and its use, differently. It’s important that employers understand this difference.

Medical. Since about 2001, cannabis used for medical purposes has been legal, if used in a manner that complies with the applicable laws. Currently, two laws govern the use, possession and distribution of medical cannabis in Canada: the Access to Cannabis for Medical Purposes Regulations, under which a person can only obtain a legal supply of cannabis from a federally licensed producer, which can only sell or provide it to a person who has a “medical document” provided by a medical or nurse practitioner; and the Narcotic Control Regulations (NCR), under which a health care practitioner can administer dried cannabis to, or prescribe or transfer it for, a person if the person is a patient under their professional treatment, and the dried cannabis is required for the condition for which the person is receiving treatment. And just as employers are figuring out how to deal with cannabis in the workplace context, insurers are figuring out how to deal with medical cannabis coverage claims in the casualty insurance context and medical cannabis claims in the health benefits context. The proposed new laws don’t impact this medical cannabis legal regime, which will continue to operate parallel to the newly proposed recreational cannabis legal regime.

“Decriminalization” vs. “legalization”. These terms aren’t interchangeable. Decriminalization is a loosening of criminal penalties imposed for personal cannabis use even though the manufacturing and sale of the substance remain illegal. Essentially, law enforcement is instructed to look the other way when it comes to the possession of small amounts of cannabis meant for personal use. The manufacture and sale of cannabis remains unregulated by the state and those caught using the substance face civil fines instead of criminal charges. Growers, suppliers and retailers typically still face the prospect of criminal sanctions. In contrast, legalization is the lifting or abolishment of laws banning the possession and personal use of cannabis that, importantly, allows the government to regulate and tax cannabis use and sales.

Review, update and revise existing workplace policies to deal with cannabis at work.

Not surprisingly, the new draft laws don’t deal with workplace safety because it’s an area that primarily falls within the authority of provincial, rather than federal, laws. Even though there aren’t yet any provincial laws yet in place, since the stigma is disappearing and usage is up, employers should immediately undertake a thorough review of all workplace policies to ascertain which require revision to address the legalization of recreational cannabis. The number of affected policies and their names will vary from employer to employer, but here are the five key broad areas on which to focus:

“Drug” Definition. Many workplace policies that related to drugs (alone or in combination with alcohol), define “drugs” as “illicit” or “illegal” drugs, often expressly including cannabis in that category. But when recreational cannabis becomes legal, these definitions will no longer apply to cannabis. At that point, cannabis will more closely resemble alcohol than cigarettes in this respect: legal, but with the ability to impair. Employers will need to review all policies that include a definition of “drugs” and revise them to ensure they include – or don’t exclude – cannabis, as appropriate.

Workplace Impairment, Testing & Safety Policies. Once legalized, cannabis will more closely resemble alcohol in this respect but with two – significant and intertwined – distinctions that will create uncertainty and could wreak havoc on most employers’ impairment and drug testing policies: the lack of a metric for cannabis impairment and the lack of precise and timely current impairment testing methods, both of which the 2016 Task Force Report acknowledges specifically in relation to workplace safety:

…We acknowledge the clear need for investment in detection and enforcement tools. Most importantly, investment in research to link THC levels to impairment and crash risk is required to support the establishment of a scientifically supported per se limit. In addition, investments to support the development of accurate and reliable roadside testing tools are required … The concerns expressed on workplace safety reinforce the urgent need for research to reliably determine when individuals are impaired. [As above in relation to] impaired driving, the ability to determine impairment with cannabis – through technology or specialized training – is not as advanced as our ability to measure the relationship between consumption and impairment with alcohol…

The magic number. There is an accepted lack of scientific data correlating the presence of THC and actual impairment. Unlike with alcohol, for which evidence was gathered over years to arrive at an established metric for alcohol intoxication (Blood Alcohol Concentration or BAC), this type of data doesn’t exist for cannabis. Indeed, the proposed new laws make driving with a blood drug concentration exceeding the prescribed limit a criminal offence – but hasn’t yet set that prescribed limit. Experts have observed that, “[t]here is no reliable way to relate urine or blood levels to impairment”. As with alcohol, the effects of cannabis vary tremendously between users: “[m]arijuana metabolism varies widely due to wide variability in THC concentration in cannabis leaves, depth of inhalation, respiratory function, fat accumulation, and variable rate of liver metabolism.” But unlike alcohol, THC can remain in the brain and body of chronic, heavy cannabis users for prolonged periods of time – sometimes several days or weeks – far beyond the period of acute impairment and potentially contributing to a level of chronic impairment. Some heavy, regular users (including those who use it for medical purposes) might not show any obvious signs of impairment even with significant THC blood concentrations; yet infrequent users with the same or lower THC concentrations might show more significant impairment. To further complicate things, there’s a significant combination effect when cannabis is consumed with alcohol, leading to a greater level of intoxication and motor control problems than when either is consumed alone.

Testing methods. The second fundamental distinction is the lack of precision around testing for both timely and accurate current impairment levels for cannabis. Measuring THC in blood, urine, or saliva is relatively easy, but none can, as yet, distinguish recent use from chronic or earlier (e.g. days or even weeks earlier) use. Research indicates people are most impaired only within a couple of hours of smoking cannabis (though the Medical Review Officer handbook indicates employees have “reduced abilities” for “at least 4-6 hours after a dose of marijuana”), not days later. Frequent cannabis users will have elevated levels of THC in blood, urine, and saliva even if they haven’t smoked in days, and thus might not be impaired. Oral fluid swab is currently the most common and widely-accepted test for cannabis impairment due to recent use because of the similarity between oral fluid THC concentrations and blood plasma THC concentrations compared to urine or hair testing, and it’s less invasive than a blood sample. But unlike alcohol testing methods, to date there’s no accepted, reliable oral swab that delivers an immediate result. Some can give a fast reading, but only indicate a positive or negative result for active THC, not the amount. Swabs must be analyzed in a lab, either on or off-site, with the results taking days to weeks to reach the employer. However, oral fluid testing that detects and indicates THC levels within minutes is in development; in particular, employers will want to keep an eye on the current Canadian police pilot of portable roadside testing tools to measure THC presence in a driver’s system.

Workplace Usage Policies. Many workplace policies prohibit the use of “illicit drugs” on the employer’s premises; however, once legalized, cannabis will no longer be illicit. In this respect, cannabis will become more similar to alcohol, and less like cigarettes: legal, but with impairment potential. Employers have the authority to prohibit its use in the same way they prohibit the use of alcohol on their premises, as well as during working hours or otherwise as appropriate depending on the position and work environment (for example, while “on call”).

Accommodation-Related Policies. Under human rights laws, employers have a legal duty to accommodate a disability: a duty to arrange an employee’s workplace or duties, if it can do so without undue hardship, to enable the employee to do their work. The duty to accommodate applies to medical cannabis use; it also applies to dependency on drugs, whether legal or illegal, as it does to alcoholism. But just as there’s no duty to accommodate recreational alcohol use that falls short of a disabling alcohol dependence, there’s no legal duty to accommodate recreational cannabis use that falls short of a disabling drug dependence – even when it’s legal. Review accommodation-related policies to ensure they clearly delineate when the employer’s duty to accommodate for cannabis use, both medical and non-medical, as well as drug use generally, applies.

Scent Policies. Time to sniff out that old scent policy and give it the smell test. Similar to cigarette smoke, and perhaps to a lesser degree alcohol, cannabis smoke has a strong, distinct – and for many, unpleasant – odor. Consider revising scent policies to address the smell of cannabis smoke and, if it doesn’t already, add in cigarette smoke and alcohol odor too.

Non-unionized workplace. Employers of a non-unionized workplace have the right to unilaterally institute or change a policy provided it doesn’t amount to a fundamental change to an employee’s contract of employment that demonstrates that the employer no longer intends to be bound by the employment contract. If it does so, the employee is entitled to consider itself constructively dismissed. Generally speaking, it’s unlikely that the proper introduction of any of the policies above would amount to a constructive dismissal, but employers should take care: it will depend on the particular circumstances.

Unionized workplace. Employers of a unionized environment have the right to institute a policy without the union’s endorsement if it satisfies the “KVP” criteria (named for the arbitration case in which it was first enunciated):

The policy (or any aspect of it) must not be inconsistent with the collective agreement.

The policy must not be unreasonable.

The policy must be both clear and unequivocal.

The employer must have brought the policy to the affected employee(s)’ attention before acting on it, putting them on notice of what’s required, that a breach could result in discipline including discharge (if applicable) and if their employment is in jeopardy.

McInnes Cooper has prepared this document for information only; it is not intended to be legal advice. You should consult McInnes Cooper about your unique circumstances before acting on this information. McInnes Cooper excludes all liability for anything contained in this document and any use you make of it.